Warranty Deed
A deed in which the seller guarantees clear, marketable title and promises to defend the buyer against any title defects — the strongest form of ownership transfer.
A warranty deed (often called a general warranty deed) is the strongest form of deed used to transfer real estate. In it, the seller (grantor) not only conveys the property to the buyer (grantee) but also makes a series of covenants guaranteeing that title is clear and promising to defend the buyer against title claims — even those arising from before the seller owned the property. This stands in sharp contrast to a quitclaim deed, which transfers only whatever interest the grantor happens to have, with no guarantees.
The covenants of title
A general warranty deed typically includes:
- Covenant of seisin — the grantor actually owns the property and has the right to convey it.
- Covenant against encumbrances — there are no undisclosed liens or encumbrances beyond those stated.
- Covenant of quiet enjoyment — the grantee will not be disturbed by someone with a superior claim.
- Covenant of warranty / further assurances — the grantor will defend the title and do what is needed to perfect it.
These covenants cover the property's entire history, not just the grantor's period of ownership — which is what makes the general warranty deed the most protective for a buyer.
Where warranty deeds appear
General warranty deeds are standard in arm's-length residential sales, especially where a buyer obtains a loan and the lender requires strong title protection backed by title insurance. A special warranty deed is a narrower cousin (covering only the grantor's ownership period), and a grant deed sits in between in some states.
Why a warranty deed matters in note transactions
In owner-financed and seller-financed deals — the world of mortgage notes — the type of deed used to convey the property to the borrower affects the quality of the collateral securing the note. If the borrower took title by general warranty deed with title insurance, the chain of title is more likely clean and the property's value more defensible, which strengthens the note. A note buyer's due diligence and a title search will look at how title was conveyed and whether title insurance exists. A property that changed hands by quitclaim, with title questions, makes the underlying collateral — and therefore the note — riskier and worth less. (Note: the deed conveys ownership; the note plus mortgage or deed of trust creates the debt and lien. They are separate documents that work together.)
Example
A seller conveys a home to a buyer by general warranty deed and the buyer obtains an owner's title policy. The buyer finances part of the price with a seller-carried note secured by a deed of trust. Years later, when the seller sells that note, a note buyer is reassured that the borrower holds strong, insured title — clean collateral that supports a higher purchase price for the note.
This entry is general information, not legal advice. The exact covenants and effect of a deed depend on the deed's wording and state law; consult a qualified attorney or title professional.